Monday, April 13, 2015
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Monday, 13 April 2015 17:08
Why so many anomalies in Malaysia's GST?
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Why so many anomalies in Malaysia's GST?
THE mechanic is popular in the area. The cars of the neighbourhood are under his care. And there's a reason for his repeat clientele. After he's done with your car, he presents the itemised billing and a plastic bag containing the parts he has changed.
The last line in the bill is classified under "labour cost" which varies on the amount of time he or his co-workers spent on your car. If he called it "service charge", would anyone bat an eyelid?
So, when the waiter at a five-star hotel presents the bill for the meal complete with the service tax and GST, would you refuse to pay for the service?
This is the crux of the issue that politicians and civil servants are falling over themselves and yet unable to provide plausible explanations for their antics which have now become a comedy of errors.
Let's get to basics. There is no law preventing anyone from imposing a fee for his or her services. And this comes with a caveat – the person who pays for the service or goods must be aware of such charges.
So, if you are presented with a food menu with the words "All prices subject to 6% GST and 10% service charge", you take cognizance that such a fee exists. If you don't agree, you walk away to another outlet.
This forms the basis on which price tagging laws have been promulgated – to enable the customer to know what he is paying for – no hidden charges whatsoever.
So, what is this hullabaloo about having to display collective agreements between workers and employers before outlets can charge service tax?
The public wants to learn and acquire knowledge. Please enlighten us as to which statute or regulation requires outlets to make such displays? To put it on record, I have perused all the laws which the minister and his civil servants have been referring to – the Profiteering Act, the Supply of Goods Act, the Price Control Act and even the Trade Descriptions Act.
There is not a single clause which makes it mandatory for such agreements to be displayed. And it has been common practice for hotels to levy a service charge, which is distributed to employees on a scale based on points.
And that's perhaps why these outlets have defied the so-called directive and continue to impose the service charge. What action can be taken for such rightful defiance? Nothing, zero, zilch, kosong!
The Malaysian Association of Hotels says only 7% have collective agreements with the respective unions. So, is the government saying: "These 7% can collect the charges and the remaining must not levy the charges"?
Its president Cheah Swee Hee hit the nail on the head when he said that the way ahead is to sit down and talk to stakeholders. Why was this not done before some people shot their mouths off?
Rightly, he said: "It is not only the practice here but the world over. Allowing only unionised hotels to get this benefit is a double standard."
But a moot yet important point: The majority of the population does not wine and dine at such up-market outlets. They eat out at stalls or restaurants. Why address an issue which only caters for the well-heeled and affluent?
Again, the consumer must be given a choice if he wants to eat at some posh place or the mamak stall down the road. No one is putting a gun to anyone's head and compelling him or her to an outlet which has all kinds of charges.
The price of "ice kosong" is now 50 sen and Chinese tea 80 sen. Has anyone raised an issue? Honestly, nothing can be done even if tap water is priced at RM10 as long as there is a price list or menu.
From Day One, there had been little or no discussion on GST with stakeholders. Judging from the health minister's remarks, it is obvious that even government departments and agencies were not consulted.
Datuk S. Subramaniam has requested the Customs Department to broaden its list of GST-exempt medication saying that most medications used in normal treatments should be exempted including cancer medication and treatment as an example.
He stated that when the list was provided, it contained over seven thousand types of medicines. Stating that Customs Department is still reviewing the list and has yet to respond, Subramaniam reiterated that the exemption list ought to be widened.
So, who was consulted when the list of goods were picked? It is ironical that tinned sardines are subjected to GST and fresh lobsters exempted.
On the issue of GST, it would not be wrong to say that the Customs Department goofed. In most countries, three areas – household goods, health and education are not touched. Even when touched, consideration is given to goods or services which would affect the ordinary person.
The inevitable question is: Why was not there a consultation process? Why are there so many anomalies and doubts?
There is a thick line between ignorance and stupidity. However, some bungling civil servants have intertwined both at the expense of the rakyat. - Sundaily
http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=493531:why-so-many-anomalies-in-malaysias-gst?&Itemid=3#axzz3X5LxTxwA
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